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<keyword id="6388367" type="COMPANY" weightage="100" keywordseo="Jabong">Jabong</keyword>, which used to lead India’s online fashion portal, has been on the block for over a year, trying hard find a buyer even as its investors have drastically dropped the asking price. 
 
The firm, which was backed by Rocket Internet, saw a major drop in sales and cut losses in 2015. The investors have now settled for an estimated price of $100 million, which is unbelievably low from around $1 billion, the amount that it had sought during talks with Amazon India in 2014, a deal that didn’t see the light of the day. 
 
Even though Jabong was founded under Rocket Internet in 2012, it’s the Swedish investor Kinnevik that is asking for a sale. Kinnevik owns a big stake in Jabong's parent company Global Fashion Group. 
 
"They (Rocket Internet and Kinnevik) just want to park the company somewhere, find a home for it," said one person aware of the matter. "But there are no buyers yet." 
 It was earlier this month that Rocket Internet sold another of its India portfolio companies, the furniture portal Fabfurnish, to <keyword id="44950" type="PERSON" weightage="100" keywordseo="Kishore-Biyani">Kishore Biyani</keyword>'s Future Retail for around Rs 11 crore. 
 
Jabong was not only in with Amazon India for a possible buyout, but also with several other Indian online marketplaces. In fact, in 2015, an offer to buy Jabong at around $200 million in 2015 was rejected, a source told ET. 
 
 
<a href="http://www.suitsbysuits.com/assets/htmlimages/iStock_No_Hand_Shake_000020725761Small.jpg">Image source</a>

Jabong has no buyers, not even at the unbelievably low price of Rs 663 crore

Fashion ecommerce company <keyword id="6388367" type="COMPANY" weightage="100" keywordseo="Jabong">Jabong</keyword>, which is running in losses, has been given additional funds by <keyword id="2504271" type="UNKNOWN" weightage="100" keywordseo="Global-Fashion-Group">Global Fashion Group</keyword> (<keyword id="47053" type="UNKNOWN" weightage="100" keywordseo="gfg">GFG</keyword>), so that it can stay afloat for one more year. 
 
"The board has agreed to put more than $20 million in Jabong," a person who participated in the meeting held in Luxembourg told ET. GFG was founded in 2011 by Swedish Investment <keyword id="3106793" type="UNKNOWN" weightage="100" keywordseo="AB-Kinnevik">AB Kinnevik</keyword> and German <keyword id="834871" type="UNKNOWN" weightage="100" keywordseo="Rocket-Internet">Rocket Internet</keyword> SE, and operates ecommerce ventures Dafiti in Latin America, Lamoda in Russia and the CIS, Namshi in the Middle East, Zalora in Southeast Asia and Australia while operating Jabong in India. 
 
It is reported that Oliver Samwer, CEO of Rocket Internet and deputy chairman at GFG, was not in favour of continuing the India venture, it was Kinnevik that insisted on staying put, leading to which the board eventually agreed to back Jabong. 
 
Jabong receives funds on a regular basis, similar to the financing structure of other multinational corporations, the company said in an email, adding that there are no pre-agreed funding commitments. 
 
"GFG has raised over $1.5 billion in capital in its history and its Board remains unanimously committed to all regions it operates in, including India. Jabong has made a number of recent senior management hires and has also recently witnessed record operating performance. These facts, which are supported by public filings on our current investment rate, are clearly evident of GFG's commitment to growing Jabong," GFG said in an email. 
 
Jabong further added that it denies "any other rumours or speculations that are to the contrary." 
 
<a href="http://economictimes.indiatimes.com/thumb/msid-51218105,width-310,resizemode-4/jabong-gets-20-million-to-stay-afloat-for-one-more-year.jpg">Image source</a>

Jabong gets $20 million in fresh funding round

Negotiations to acquire <a href="http://www.businessinsider.in/searchresult.cms?query=jabong&amp;sortorder=effectivedate">Jabong</a> are underway and <a href="http://www.businessinsider.in/searchresult.cms?query=alibaba&amp;sortorder=effectivedate">Alibaba</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=future+group&amp;sortorder=effectivedate">Future Group</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=myntra&amp;sortorder=effectivedate">Myntra</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=aditya+birla+group&amp;sortorder=effectivedate">Aditya Birla's</a> ecommerce venture <keyword id="3103299" type="UNKNOWN" weightage="20" keywordseo="Abof">Abof</keyword> are among the top contenders to seal the deal, which is expected to be at $250-$300 million. 
 <keyword id="541988" type="COMPANY" weightage="20" keywordseo="SnapDeal">Snapdeal</keyword>, reportedly, is also said to be in the race but won’t bid that aggressively. Even though <keyword id="6388367" type="COMPANY" weightage="100" keywordseo="Jabong">Jabong</keyword> has asked for $250-300 million, the deal size could be lower. 
 
German incubator Rocket Internet, who founded Jabong in 2012, and Swedish investment firm Kinnevik, which owns a large stake in Jabong's parent Global Fashion Group, are keen to exit. 
 
"Jabong has held talks with these four companies over the past few weeks. While none of the negotiations has reached an advanced stage, the deal size could be around two times its annual sales and is expected to close within the next six months," a executive told ET. 
 
Executives from Rocket Internet and Kinnevik are currently camping in India to oversee a sale, ET quoted sources as saying. 
 
ET reported that Jabong's revenues dropped 7% to Rs 869.1 crore in 2015 from the year earlier but it trimmed losses to Rs 46.7 crore from Rs 159.5 crore after a clampdown on discounts, much as other ecommerce companies have done. 
 
The Gross Merchandise Value (GMV) rose 14% to Rs 1,503 crore from almost 5.4 million orders. 
 
Jabong's net sales grew 14% to 32.6 million in the March quarter with a gross profit of 0.2 million as it derisked business by moving more toward the consignment and marketplace model and away from discounting. 
 
Apart from this, another attractive deal with Jabong could be its top management. Jabong hired former Benetton India managing director Sanjeev Mohanty as chief executive in 2015 and former eBay executive Muralikrishnan B as chief operating officer in February. 
 
Harminder Sahni, founder of retail consultancy Wazir Advisors, told ET, “I see merit in somebody acquiring and rebuilding brand because it is not easy to build brand awareness of that level in today's time as nobody is going to fund that kind of money in brand building anymore.” 
 
(Image: Thinkstock)

Alibaba, Future Group, Myntra in race to buy Jabong, deal size expected to be $250 million

Berlin-headquartered company <a href="http://www.businessinsider.in/Rocket-Internets-selling-2-really-big-online-brands-to-the-Future-Group/articleshow/51120395.cms">Rocket Internet</a> has invested a funding of 300 million euros (about Rs 2,282 crore) in Global Fashion Group (GFG), the parent company of online fashion portal Jabong. 
 
The German start-up investor will underwrite around 100 million euros (about Rs 760.7 crore), and will invest around 85 million euros (about Rs 646.7 crore), which would include the conversion of an existing investment at the terms of the financing. 
 For this transaction, GFG was valued at 1 billion euros post the transactions, said a <keyword id="834871" type="UNKNOWN" weightage="100" keywordseo="Rocket-Internet">Rocket Internet</keyword> statement. 
 
"The financing will provide GFG with the necessary capital to continue to execute its strategy of building out its leading position in the online fashion sector in emerging markets," GFG Chief Executive Officer Romain Voog said. 
 
In the first quarter of 2016, GFG has meaningfully reduced losses from operations as compared to period a year ago, which has very well resulted in it seeing an improvement of the adjusted EBITDA margin by over 10 percentage points. 
 
"This is in line with GFG's plan to deliver an accelerated path to profitability across its regional businesses while continuing to capture the significant market opportunity available," Voog said. 
 
Also read: <a href="http://www.businessinsider.in/Investors-unwilling-to-buy-Jabong-for-500mn-say-its-worth-only-half-as-much/articleshow/49465326.cms">Investors unwilling to buy Jabong for $500mn, say it's worth only half as much!</a> 
 
GFG, which was founded in 2014, combines six regional brands all across the world, viz. Dafiti in Latin America, Lamoda in Russia and CIS, Namshi in the Middle East, The Iconic in Australia, <a href="http://www.businessinsider.in/Jabong-has-no-buyers-not-even-at-the-unbelievably-low-price-of-Rs-663-crore/articleshow/51839070.cms">Jabong in India</a> and Zalora in South-East Asia. 
 
"We continue to be very excited about the prospects of GFG, which has successfully built out leading market positions in key emerging markets. We are looking forward to continuing to work with the GFG team as well as Kinnevik and the other GFG shareholders to support GFG," Rocket Internet CEO Oliver Samwer said. 
 <keyword id="209933" type="PERSON" weightage="100" keywordseo="Sanjeev-Mohanty">Sanjeev Mohanty</keyword>, MD and CEO of Jabong, said that the funding will help the firm enhance its business operations. 
 
"We have had success over the <a href="http://www.businessinsider.in/Jabong-gets-20-million-in-fresh-funding-round/articleshow/51223168.cms">past few months</a>, with Jabong recently recording its best month in terms of <a href="http://www.businessinsider.in/Say-goodbye-to-huge-discounts-as-Myntra-Jabong-wants-to-make-profits-now/articleshow/50768977.cms">revenue</a>... GFG sees good progress with Jabong in India and this trust will help us strengthen our operations in the country," he added. 
 
<a href="http://coefficiency.com.au/wp-content/uploads/2014/09/shutterstock_98277620.jpg">Image source</a>

Rocket Internet invests 300 million Euros in Jabong’s parent company GFG

In a bid to seal its position as market leader, <a href="http://www.businessinsider.in/searchresult.cms?query=flipkart&amp;sortorder=effectivedate">Flipkart </a>has acquired online fashion portal<a href="http://www.businessinsider.in/searchresult.cms?query=jabong&amp;sortorder=effectivedate"> Jabong</a> through its unit <keyword id="319719" type="COMPANY" weightage="100" keywordseo="Myntra">Myntra</keyword>. The e-commerce player has pipped rival <keyword id="541988" type="COMPANY" weightage="100" keywordseo="SnapDeal">Snapdeal</keyword> and <a href="http://www.businessinsider.in/searchresult.cms?query=aditya+birla+group&amp;sortorder=effectivedate">Aditya Birla Group</a> to seal the deal at an estimated $70 million.
 <keyword id="6388367" type="COMPANY" weightage="100" keywordseo="Jabong">Jabong</keyword>, which was at par with <keyword id="6354742" type="COMPANY" weightage="100" keywordseo="Flipkart">Flipkart</keyword>'s <a href="http://www.businessinsider.in/searchresult.cms?query=myntra&amp;sortorder=effectivedate">Myntra</a> in sales until early 2014, has seen a steep decline in market share since then. This is mainly because of the crores Myntra’s parent Flipkart, Snapdeal and Amazon have been spending on advertisements and discounts.

	By the end of May, Jabong was down. While it reported a 14% hike, it's loss only narrowed from €11.9 million from €16.3 million in the same quarter a year earlier.

	Not to mention, the company has seen an exit of senior management, slowdown in funding and overbearing competition from Amazon India.

	Earlier this month, Jabong fastened up its exit process as the firm’s owners, AB Kinnevik and Rocket Internet didn't want to pump more money into a losing race horse.

	The valuation of GFG (owner of Jabong) slid almost a third to $1.13 billion in a mere 10 months. In May, the company last raised $339 million from Kinnevik and Rocket Internet, but that was a much lower valuation.

	The current deal is estimated to be around $50-75 million, allowing existing investors Rocket Internet and Kinnevik AB to quit.

	Jabong’s investors have managed to find a buyer for their struggling business, but does this mean any good for Flipkart? We'll have to wait and watch. 
	 
	<a href="http://ateen.in/wp-content/uploads/2014/09/jabong-21.jpg">Image Source</a>

The Story of Jabong's exit: From $500Mn to $70Mn

If you’re a fan of buying fashion stuff online, here’s something of your interest. We hope you have upgraded to a smartphone by now. Because fashion ecommerce company <keyword id="319719" type="COMPANY" weightage="20" keywordseo="Myntra">Myntra</keyword> will be shutting down its website from 15th of this month and become an “app only” platform. With mobile-based commerce emerging as the next biggest opportunity, Myntra is taking the lead in marking the end of desktop and browser based shopping. 
 
The rapid expansion of smartphones from 120-140 million in 2014 to 600-700 million in 2020 will provide the base for creation of an inclusive market unprecedented in the history of fashion shopping. Mobile apps are taking utilitarian role in users’ life by being the default mode of accessing and consuming internet services. According to a recent study, 90% of smartphone users in India use apps, which is close to 158 million as of today. The country ranks second only to the US in the usage of shopping apps. 
 However, if you dislike shopping from mobile, blaming it to the smaller screen size, know here, <keyword id="6388367" type="COMPANY" weightage="20" keywordseo="Jabong">Jabong</keyword> will keep websites open for apparel shopping. 
 “We strongly believe customers should have <keyword id="819468" type="UNKNOWN" weightage="20" keywordseo="the-choice">the choice</keyword> to buy either on his smartphone or on the computer," Jabong <keyword id="217739" type="POSITION" weightage="20" keywordseo="cofounder">Cofounder</keyword> <keyword id="536011" type="PERSON" weightage="20" keywordseo="Praveen-Sinha">Praveen Sinha</keyword> told The Economic Times, adding that the <keyword id="174155" type="CITY" weightage="20" keywordseo="Gurgaon-based">Gurgaon-based</keyword> company generates half its sales from mobile devices and will continue to host its website. "It's still 50-50 for us." 
 
Sinha said an app-only operation may limit price comparison and product visibility for consumers, who could find it easier to quickly open other sites on a laptop or desktop. "Getting a price discovery from an app will be very difficult.” 
 
Jabong won’t raise funds independently: In an interview with The Economic Times, Jabong Cofounder Praveen Sinha has said, “Funds will be raised at a global level and allocated to the various country-specific businesses as the need arises. Jabong is now part of the <keyword id="2504271" type="UNKNOWN" weightage="20" keywordseo="Global-Fashion-Group">Global Fashion Group</keyword> (GFG). 
 Sinha said Jabong will no longer raise funds independently. It received $100 million from British development finance institution CDC and other investors last year. Jabong is now part of the Global Fashion Group, which will provide the finances. GFG will now become the central group where, if required, further <keyword id="6357455" type="EVENT" weightage="20" keywordseo="Funding">funding</keyword> will be raised." 
 As per the financial daily, last year, Rocket Internet and AB Kinnevik created a global alliance of five large ecommerce companies in which both have sizeable investment -- Jabong, Dafiti in <keyword id="48890" type="COUNTRY" weightage="20" keywordseo="Latin-America">Latin America</keyword>, Lamoda in <keyword id="6358826" type="COUNTRY" weightage="20" keywordseo="Russia">Russia</keyword> &amp; CIS, Namshi in <keyword id="1009187" type="UNKNOWN" weightage="20" keywordseo="the-middle">the Middle</keyword> East and Zalora in <keyword id="53564" type="UNKNOWN" weightage="20" keywordseo="Southeast-Asia">Southeast Asia</keyword> and <keyword id="6355478" type="COUNTRY" weightage="20" keywordseo="Australia">Australia</keyword>. Sinha told the ET that, as part of the global alliance, Jabong will be able to secure exclusive rights to sell foreign brands in India, to list brands in other countries and meet its technological requirements. 
 Sinha was dismissive of the buzz that US-based <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>.com was in talks to acquire Jabong in a bid to gain a strong foothold in fashion, one of the fastest-growing segments of online retailing. 
 
“Talks with Amazon were never serious," he said. Germanybased Rocket Internet's ambition is to become the largest online platform outside China and the US and Jabong is an important cog in its global scheme of things.

You Searched For "kinnevik jabong" and got 6 results

Jabong has no buyers, not even at the unbelievably low price of Rs 663 crore

BI India Bureau

Jabong gets $20 million in fresh funding round

BI India Bureau

Alibaba, Future Group, Myntra in race to buy Jabong, deal size expected to be $250 million

BI India Bureau

Rocket Internet invests 300 million Euros in Jabong’s parent company GFG

BI India Bureau

The Story of Jabong's exit: From $500Mn to $70Mn

Saikat Pyne

Myntra now an App-only brand, Jabong not keen on shutting down website for app-only approach

BI India Bureau

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